On Tuesday, Cerebras Systems, a company best known for its wafer-scale processors for artificial intelligence, filed an IPO application on the Nasdaq stock exchange under the symbol CBRS. Cerebras, which offers both Wafer Scale Engine 3-based servers and cloud services (sometimes in partnership with giants like Group 42), revealed financial results for recent years and it turns out that the company’s revenues are increasing and losses are decreasing. Great time for an IPO.
Cerebras’ valuation is currently unclear.
In 2022, Cerebras’ total revenues, including equipment sales and services, were $24.62 million, while losses reached $177.7 million. The company increased its revenue to $78.74 million in 2023 and reduced losses to $127.15 million in 2023. This year, Cerebras’ revenue skyrocketed to $136.4 million in the first half of the year alone, while losses dropped to $66.60 million.
Revenue growth is primarily driven by UAE Group 42 (also known as G42), a UAE-based artificial intelligence company that accounted for 83% of Cerebras’ revenue in 2023 and 87% of the company’s revenue in the first half of 2024. In an agreement signed in May 2024, Group 42 committed to purchasing $1.43 billion worth of Cerebras products by March 2025. Group 42 currently owns less than 5% of Cerebras’ Class A shares, but may acquire more depending on the size of future shopping.
Relying essentially on one gigantic customer based in the United Arab Emirates, a country subject to U.S. export restrictions, comes with risks, and Cerebras makes no secret of it.
“While we have obtained an export license from BIS to export, re-export or transfer (in-country) our CS-2 systems to G42 in the UAE, all systems that we have sold to G42 or for which purchase orders have been placed by G42 have so far been or are expected to be implemented in the United States, which does not require an export license from BIS,” Cerebras said in a statement. “To the extent that we are unable to export to a specific customer without a license from BIS, we may seek a customer license. However, the licensing process is time-consuming. There can be no assurance that BIS will grant such a license or that BIS will process a license application in a timely manner. Even if BIS issues a licence, it may impose onerous conditions that we or our client cannot accept or agree to.
The company competes with both AI giant Nvidia and other AI processor supporters such as AMD and Intel. The main benefit of Cerebras’ Wafer Scaling Engine (WSE) processors is high-bandwidth, low-latency interconnection that optimizes both performance and power consumption. Although the processors are challenging to produce at wafer scale, their performance, energy efficiency and throughput ensure that Cerebras will have a special place in the market due to its unique advantages.
